Titanium dioxide

14 November 2005 00:01[Source: ICB]

14-20 November 2005

USES

Titanium dioxide (TiO2) is used as a pigment to provide brightness, whiteness and opacity to paints and coatings, plastics, paper, inks, fibres, food and cosmetics. The largest consumer is paints, then plastics and paper. The rest is used in speciality applications. TiO2 is available as anatase or rutile.

SUPPLY/DEMAND

Global demand has gone into decline this year after a very strong 2004. In Europe, demand is reported by producers to be down about 5% on the previous year. In addition, certain suppliers have preferred at times to chase market share over margins. Central and east European producers have also started to become more prominent at the cheaper end of the market.

World overcapacity and low pricing has forced cuts of some high-cost capacity. In 2004, Huntsman Tioxide cut capacity at Grimsby, UK, and Umbogintwini, South Africa; Kerr-McGee closed its sulphate line in Savannah, US, and Lyondell reduced output at Le Havre, France. Current world capacity is put around 4.7m tonne/year against estimated demand of 4.2m tonne/year.

Prior to the recent hurricane-induced outages in the US, world inventories were rising. The impact of the closure of DuPont’s storm-damaged DeLisle plant remains unclear, but markets could tighten in the first quarter depending on how the restart progresses. Producers say supply in Europe is quite balanced although chloride product availability is tightening. Lyondell has bought Millennium Chemicals and Kerr-McGee plans to spin off its TiO2 business, named Tronox, by year-end.

PRICING

Europe still has the highest prices compared to other world regions. Gains were made in the first half but numbers have slipped since the summer. Prices are now quoted at €2000-2300/tonne. Producers have posted increases of €150-180/tonne but, with big customers enjoying 90-day price protection, it remains to be seen whether the hikes will be accepted. Margins have come under pressure this year as TiO2 price rises lag behind increasing energy and raw material costs.

TECHNOLOGY

TiO2 is produced from either ilmenite, rutile or titanium slag. Titanium pigment is extracted by using either sulphuric acid (sulphate process) or chlorine (chloride route). The sulphate route uses simpler technology than chloride and can use lower grade, cheaper ores. But, it generally has higher production costs and with acid treatment is more expensive to build than a chloride plant, although the latter may also need a chlor-alkali unit.

Chloride technology produces a purer product with a tighter range of particle size, but anatase pigments can only be produced by the sulphate route. Over half of world production is estimated to use the chloride process. DuPont and Kronos settled a patent dispute last month and can now cross-license each other’s patents worldwide.

OUTLOOK

Producers are hoping that markets will recover next year. Future demand growth in Europe is put at 2-3%/year. Capacity additions are not keeping pace with annual demand growth but investment in new plants is unlikely while returns remain poor. China is the world’s strongest growth region and DuPont is in talks for a plant in Dong­ying. Expansions are proposed in Russia, the Ukraine, Finland, Czech Republic, and Poland.?

MAJOR GLOBAL TIO2 CAPACITY, ’000 TONNE/YEAR

Company

Location

Capacity

Process

DuPont

Altamira, Mexico

125

C

DeLisle, Mississippi, US

300

C

Edge Moor, Delaware, US

155

C

Kwan Yin, Taiwan

125

C

New Johnsonville, Tennessee, US

380

C

Huntsman Tioxide

Calais, FranceGreatham, UK

95100

SC

Grimsby, UK

40

S

Huelva, Spain

80

S

Scarlino, Italy

80

S

Teluk Kalung, Malaysia

60

S

Umbogintwini, South Africa

25

S

ISK

Jurong, Singapore

45

C

Yokkaichi, Japan

92

S

Yokkaichi, Japan

68

C

Kemira

Pori, Finland

130

S

Kerr-McGee

Botlek, Netherlands

70

C

Hamilton, Mississippi, US

200

C

Savannah, Georgia, US

91

C

Uerdingen, Germany

105

S

Kronos

Ghent, Belgium

74

C

Frederikstad, Norway

30

S

Leverkusen, Germany

145

C

Leverkusen, Germany

28

S

Nordenham, Germany

60

S

Varennes, Quebec, Canada

73

C

Varennes, Quebec, Canada

17

S

Louisiana Pigments*

Lake Charles, Louisiana, US

146

C

Lyondell Chemical

Ashtabula, Ohio, USBaltimore, Maryland, US

21550

CC

Kemerton, Australia

100

C

Le Havre, France

65

S

Salvador, Brazil

60

S

Stallingborough, UK

150

C

Thann, France

30

S

Sachtleben

Duisburg, Germany

90

S

* Kronos/Huntsman Tioxide 50:50 jv

Process: S=sulphate, C=chlorate

Source: ECN

Profile last published 24 November 2003; Chemical Profile is published fortnightly.

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